Roth Recharacterization

[Snaggletooth]

A client has been talking to her stockbroker. She was told she could rollover her SEP into a Roth, some $70,000, and she could split the taxation over two years..

I don't see where she could do that, unless she takes that long to convert. We do know that she can take as long as she wants and can "pay as she goes" each year. But this is the first I've heard that an entire SEP or IRA may be converted and the taxation spread over two years.

What say ye?

[BP.]

she could split the taxation over two years . . .

first I've heard that an entire SEP or IRA may be converted and the taxation spread over two years.

What say ye?

TTB 1-13 & 13-14- 2010 conversions.

[jimmcg]

A client has been talking to her stockbroker. She was told she could rollover her SEP into a Roth, some $70,000, and she could split the taxation over two years..

I don't see where she could do that, unless she takes that long to convert. We do know that she can take as long as she wants and can "pay as she goes" each year. But this is the first I've heard that an entire SEP or IRA may be converted and the taxation spread over two years.

What say ye?

General rule for 2010 conversions: Gain on conversion can be included in 2010 taxable income or spread ratably over 2011 and 2012.............Watch out for any distributions prior to 2012 of converted funds which may cause gain to be accelerated. Code 408A(d)(3)